Forex Trade Updates: GBP/USD and USD/CHF

Hey, guys! Risk aversion kept me from getting any of GBP/USD’s breakout move so now I’m back in the grind and watching a possible forex retracement on USD/CHF.

GBP/USD

GBP/USD: 1-Hour Chart

GBP/USD: 1-Hour Chart

A few days ago just before the BOE’s “Super Thursday” event I pointed out a potential descending triangle breakout on GBP/USD chart. If you remember, the BOE had kept its policies steady but remarked on the economy’s mixed performance, a deviation from Carney and his gang’s usual hawkish rhetoric.

Unfortunately, a bit of risk aversion kept me from putting on trades as soon as I saw the big moves. Since the event candle ended near Cable’s late October lows, I hesitated in trading the breakout that I’m watching. Not only that, but I also kept on watching even as the pair made new weekly lows. By the end of the week the pair had dropped by at least 300 pips from its pre-Super Thursday levels.

The lesson I have to learn here is that I shouldn’t hesitate to take any valid setups that I spot. After all, you never know when one of them turn out to be that one good trade you could have had for the year. In this case, I missed a 300-pip move because I didn’t want to take any risk (even a small one) even though the setup was fundamentally and technically sound. I think I could have gotten at least part of the action had I only reacted better and went with the weekly trend or if I had planned enough for the event to be confident on putting up a position.

How about you? Have you missed any good moves lately?

USD/CHF

USD/CHF: 1-Hour Chart

USD/CHF: 1-Hour Chart

With the GBP/USD missed trade fresh from my mind, I’m keeping close tabs on another breakout setup, this time on USD/CHF’s 1-hour chart. The pair had recently broken above the 1.0075 area, a level that hasn’t been broken since the start of the month, and is now testing the 1.0150 area. I’m spotting a bearish divergence on the chart though, so I think I might have a chance at a break-and-retest scenario.

Fundamentally I think that the dollar has few reasons not to go up. Barring any sudden news events or another onslaught of weak U.S. data, I think that forex traders might soon price in a December Fed rate hike. After all, more and more FOMC members are hinting at the possibility since the FOMC minutes revealed that the option would definitely be on the table next month.

I’m planning on risking 0.5% of my account on a long trade at the 1.0080 – 1.0100 area with my stops below the 100 or 200 SMA. If triggered, I’ll ride the uptrend all the way until the Fed rate decision or the end of the year with a couple of stop adjustments along the way. If price doesn’t go back that far though, then I’ll wait for an SMA retest or enter a small position at market and then adjusting to price action.

What do you think? Will USD/CHF go back to the 1.0100 area?

XOXO,

Huck

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